U.S. v. Chenault

• Decision Date: 27 April 1988
• Docket Number: No. 87-4655,87-4655
• Citation: 844 F.2d 1124
• Parties: 25 Fed. R. Evid. Serv. 573 UNITED STATES of America, Plaintiff-Appellee, v. Johnny Rudolph CHENAULT, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1124

844 F.2d 1124

25 Fed. R. Evid. Serv. 573

UNITED STATES of America, Plaintiff-Appellee, v. Johnny Rudolph CHENAULT, Defendant-Appellant.

No. 87-4655.

United States Court of Appeals, Fifth Circuit.

April 27, 1988.

Grady Tollison, Jr., Oxford, Miss. (court appointed), for defendant-appellant.

Alfred E. Moreton, III, Asst. U.S. Atty., Robert Q. Whitwell, U.S. Atty., Oxford, Miss., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Mississippi.

Before THORNBERRY, WILLIAMS, and DAVIS, Circuit Judges.

THORNBERRY, Circuit Judge:

Appellant Johnny Rudolph Chenault was indicted on two counts of knowingly submitting false documents in support of a claim with the intent to defraud the United States. 18 U.S.C. Sec. 495. After a jury trial in the United States District Court for the Northern District of Mississippi, Chenault was convicted on both counts. Chenault appeals his conviction, arguing that the trial judge erroneously decided several evidentiary matters, that the venue of the trial was improper, that the trial judge improperly instructed the jury, and that the government failed to prove the charged offenses. We affirm the conviction.

I

On February 12, 1985, Chenault was awarded a $173,594 Defense Department contract to build 16,690 wooden pallets. The contract allowed Chenault to request monthly progress payments of 95% of costs.

On March 8, 1985, Chenault requested his first progress payment. He submitted the request, for $103,643 in costs, to the Defense Contract Administrative Services Management Area Office in Birmingham, Alabama. Along with his request, Chenault submitted a cash flow statement showing disbursements of $89,950, and five invoices for lumber and nails. The reviewing officer noted that Chenault had requested only 90% of costs ($93,279) rather than 95% of costs ($98,461) and notified Chenault that he could submit a corrected request. On March 14 Chenault submitted a corrected request for 95% of the costs listed on the March 8 request. The corrected request was approved and Chenault was paid $98,461.

Two of the invoices Chenault submitted with the March 8 request are questionable. First, Chenault had a $63,200 invoice from Foust Bandsaw Mill, Inc. for lumber costs. Mr. Foust, the company's only salesman, testified that although he had sold Chenault about $3000 of lumber, he had never discussed with Chenault an order for $63,200. Foust testified that it would have taken him several years to fill the order as stated in the invoice. Other evidence shows that Chenault obtained the invoice from Foust Bandsaw Mill's secretary by telling her that he needed a blank invoice to show the government how the invoice would be set up. Chenault, however, testified that he talked by phone with an unidentified man who agreed to supply the lumber at the above price. He testified that he asked the secretary to send him an invoice showing this commitment, but she sent him a blank invoice. He testified that all the money he received based on this invoice went into materials for the contract.

Second, an invoice in support of the progress payment from Southern Duofast Co. showed costs of $14,622 for nails. The evidence shows that Chenault asked Duofast to calculate the number of nails that would be needed for the contract, to store them at a warehouse, and to fill out an invoice for them so he could obtain advance payment. Thus, Duofast prepared a delivery receipt for these nails and gave Chenault a copy. Duofast also prepared an invoice, but eventually canceled it. None of these nails were delivered to Chenault and he never incurred any costs on this delivery receipt. Later orders from Chenault to Duofast were listed on individual invoices and claimed on subsequent progress payment requests.

Chenault filed a second progress payment request dated April 18. This time he requested $34,460. The accompanying cash flow statement was supported by photocopies of several invoices. Like the first request, this request also contained an error--it included an ineligible $7000 cost--so the reviewing officer again notified Chenault that he would have to file a corrected request. Chenault made this corrected request and included a new cash flow statement that omitted the ineligible $7000. Thus, Chenault was paid $27,810. ¹

The dates were altered on several supporting invoices, totalling about $20,000, to reflect purchases before the April 8 cut-off date for the second progress payment. Two invoices, for $380, had both the dates and the amounts altered. Chenault testified that he changed the dates to meet the cut-off date to get money to keep his business going. He asserts that all of this money went into the contract.

The government found numerous problems with Chenault's performance under the contract. His costs were too high and, even though his delivery date had been extended by six months, he never delivered any pallets. Thus, the government terminated the contract on February 24, 1986. On March 10, the government inspected Chenault's pallets. Although he had reported in his progress payment requests that he had produced over 11,000 pallets, only 6,114 were found. Furthermore, these pallets were defective. Chenault, however, testified that he produced over 14,000 pallets and had only 6114 defective pallets on hand because of vandalism and theft.

After a jury trial, Chenault was convicted on both counts of a two-count indictment for knowingly submitting false documents in support of a claim, with intent to defraud the United States. 18 U.S.C. Sec. 495. The court ordered him to pay restitution and sentenced him to three years in prison on count one and five years probation on count two. Chenault now appeals.

II

Chenault first objects to the admission in evidence of certain statements he made to FBI agents during the investigation of this case. Ken Rust, an FBI agent, originally commenced the investigation of Chenault's contract after receiving a complaint from the Department of Defense. Rust knew that Chenault was a suspect for prosecution, and that there was a good chance that a charge against Chenault would be presented to a grand jury. Rust also knew that allegedly false documents had been submitted, but he had no idea how Chenault had obtained them or whether Chenault had altered them. With this knowledge, Rust talked with Chenault three times. The first occasion was when he and another agent, Jim Dunivant, advised Chenault of the investigation and requested certain documents. The second was when they returned the documents. The third was when they "interrogated" Chenault at his office. Prior to this third meeting, the agents had talked with some of Chenault's suppliers.

Chenault was not arrested during this third meeting. Nevertheless, this interrogation occurred only after the agents had obtained evidence against him, and they were trying to elicit direct evidence that could be obtained only from him. Chenault alleges that during the interrogation, Agent Dunivant stood, approached him, and then stated that denying that he had obtained and falsified the Foust invoice would be futile. Chenault asserts that this statement was coupled with insistent demands for admissions, intimidation, cursing, direct assertions of his guilt, and a recital of the crimes for which he could be indicted. He says that he was generally frightened and in particular afraid to leave the room, and that he did not know what would happen to him. Thus, he began answering all questions put to him. Chenault was not advised of his Miranda rights.

The government agrees with Chenault's general version of the events. It notes, however, that Chenault at no time indicated that he wanted the discussion to stop and that he seemed eager to talk. In fact, Chenault testified that he would have made the same statements even if the Agent Dunivant had acted less aggressively. Additionally, the agents twice told Chenault that he was not being arrested. The agents did remember standing and asking Chenault if he obtained and forged the invoice, but they did not recall using any curse words.

At trial, Chenault objected to the introduction of the statements he made at that third meeting. The trial court held a hearing on this issue. It found from the totality of the circumstances surrounding the questioning that no threats, coercion, or promises induced Chenault to talk. It found that the agents identified themselves, that Chenault expressed a desire to cooperate, and that Chenault was "an intelligent human who knew what he was doing." Further, the court found that Chenault was not in custody or deprived of his freedom during the questioning. Finally, the court found that Chenault was not detained by the officers to an extent sufficient to trigger the requirements of Miranda.

In this appeal Chenault argues that his statements should have been suppressed either because he should have been given Miranda warnings or because the statements were not voluntary and made without inducement or threat. Miranda warnings are necessary only when one is "in custody." United States v. Alvarado Garcia, 781 F.2d 422, 425 (5th Cir.1986). In Oregon v. Mathiason, 429 U.S. 492, 97 S.Ct. 711, 714, 50 L.Ed.2d 714 (1977), the Supreme Court held that "a noncustodial situation is not converted to one in which Miranda applies simply because a reviewing court concludes that, even in the absence of any formal arrest or restraint on freedom of movement, the questioning took place in a 'coercive environment.' " Rather, the key question is "whether there is a 'formal arrest or restraint on freedom of movement' of the degree associated with a formal arrest." California v. Beheler, 463 U.S. 1121, 103 S.Ct. 3517, 3520, 77 L.Ed.2d 1275 (1983).

This court has approached this issue of when custody exists by considering four factors: (1) whether there was probable cause for arrest; (2) whether the law enforcement officer had a...